Mandelson outlines car industry rescue
Speaking in the House of Lords, Lord Mandelson revealed a package that includes a scheme to guarantee loans for car manufacturers and major suppliers.
The loans package is to be funded by £1.3 billion in loans from Europe, with a further £1 billion coming from the UK Treasury.
The Business Secretary said it was not a bail-out of a 'lame duck' industry, but would help reinvent the car sector 'for a low-carbon' future.
He told fellow peers that the car industry needed the aid because it was 'in the frontline of the downturn' and had fallen 'faster and farther than any other sector since the summer'.
However, to comply with strict EU rules, the loan guarantees can only be used to underwrite cash for 'green' research and development, and will do little to improve car sales.
Lord Mandelson also revealed that money spent on skills training for employees would be increased from £65 million to £100 million - if the motor industry demonstrated a real demand for it.
The Business Secretary also said that Trade and Investment Minister Mervyn Davies had been asked to look at providing additional funding for car companies' financing arms, in the hope of stimulating sales through increased access to consumer credit.
The Conservatives were less than impressed with the package.
Lord Hunt of Wirral said that the package wasn't enough. He said: 'After years of persecuting the motorist, ministers now offer a range of placebos to an industry facing the worst crisis it has ever faced.'
Shadow Business Secretary Ken Clarke called the package 'pretty small beer'.